By:  Krusee (Senate Sponsor - Lindsay)                            H.B. No. 2659
	(In the Senate - Received from the House April 18, 2005; 
April 19, 2005, read first time and referred to Committee on 
Transportation and Homeland Security; May 11, 2005, reported 
favorably by the following vote:  Yeas 7, Nays 0; May 11, 2005, sent 
to printer.)


A BILL TO BE ENTITLED

AN ACT


relating to bond requirements for privatized maintenance 
contracts.       
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 223.042, Transportation Code, as amended 
by Chapters 28 and 274, Acts of the 78th Legislature, Regular 
Session, 2003, is reenacted and amended to read as follows:
	Sec. 223.042.  PRIVATIZATION OF MAINTENANCE CONTRACTS. (a) 
Of the amount spent in a fiscal year by the department for 
maintenance projects, the department shall spend not less than 50 
percent through contracts awarded by competitive bids.
	(b)  Money spent for maintenance projects to which this 
section does not apply is [are] included when computing the amount 
of expenditures for maintenance projects in a fiscal year.
	(c)  The department may award a contract under this section 
as a purchase of service under Subtitle D, Title 10, Government 
Code, if the department:
		(1)  estimates that the contract will involve an amount 
less than $15,000; and
		(2)  determines that the competitive bidding procedure 
in this chapter is not practical.
	(d)  The department shall consider all of its direct and 
indirect costs in determining the cost of providing the services. 
The department shall use the cost accounting procedures and 
instructions developed by the State Council on Competitive 
Government under Section 2162.102(c)(2), Government Code, in 
determining its cost. On request, the State Council on Competitive 
Government shall provide technical assistance to the department 
about the cost accounting procedures and instructions.
	(e)  Subsection (a) does not apply unless the department 
determines that a function of comparable quality and quantity can 
be purchased or performed at a savings by using private sector 
contracts.
	(f)  The department shall file a report with the Legislative 
Budget Board on September 1 of each fiscal year detailing the 
contracts awarded by the department under this section during the 
previous fiscal year.
	(g)  The commission shall adopt rules to administer this 
section.            
	(h)  In this section, "maintenance project" means any 
routine or preventive maintenance activity. The term includes 
mowing, concrete removal and replacement, illumination 
maintenance, guardrail repair, fence repair, litter pick-up, 
herbicide spraying, pothole repair, silt and erosion control or 
repair, sign installation, highway overlaying, paint and bead 
striping, rest area maintenance, and installation of raised 
pavement markings.
	(i)  This section does not apply to the purchase of  
materials for maintenance projects.
	(j) [(i)]  As an alternative to the requirements of Sections 
2253.021(b) and (c) [Section 2253.021], Government Code, the 
department may require that a performance or payment bond [securing 
a contractor's performance] under a contract awarded under this 
section for a [routine] maintenance project [activity]:
		(1)  be in an amount equal to the greatest annual  
amount to be paid the contractor under the contract and remain in 
effect for one year from the day work is resumed after any default 
by the contractor; or
		(2)  be in an amount equal to the amount to be paid the 
contractor during the term of the bond and be for a term of two 
years, renewable annually in two-year increments.
	(k) [(j)]  A claim against a performance or payment bond 
issued under this section must be filed against the bond in effect 
on the date the basis for the claim arose [bond posted under 
Subsection (i) must:
		[(1)  be solely for the protection of the department; 
and  
		[(2)  be conditioned on the faithful performance of the 
maintenance work in accordance with the contract requirements].
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2005.



* * * * *